Your guide to making money in the multi-billion dollar marijuana industry

Agency of Fear

Opiates and Political Power in America

By Edward Jay Epstein

Chapter 11 - The Narcotics Business: John Ingersoll's Version

... in sophisticated political units, power is diffuse and therefore
difficult to seize in a coup.

EDWARD LUTTWAK, Coup d'Etat

In July, 1970, John Ehrlichman approved a memorandum by Krogh's staff that suggested
"mounting [a] major operation with [a] code name against heroin traffickers ... to
create [an] aura of massive attack on [the] most-feared narcotic." Krogh specifically
suggested the code name -Operation Heroin for the domestic crusade. Such an operation
required, however, the cooperation (and manpower) of established investigative agencies in
the federal government, especially the Bureau of Narcotics and Dangerous Drugs in the
Justice Department and the Bureau of Customs in the Treasury Department. This presented a
bureaucratic problem, however, since both agencies considered themselves to be
semi-independent entities and both attempted to define the narcotics business in terms
that extended the domain of their agency.

When the Nixon administration assumed office, the effort to control narcotics comprised
only a minute part of the police activities of the federal government. Although the
government first became involved in narcotics control in 1914, when Congress enacted the
Harrison Narcotics Act, the federal enforcement efforts tended to be more symbolic than
substantial for at least a half century. Since the Harrison Act was theoretically a
revenue law, which required all traffickers in opium, cocaine, and their derivatives to
register with the government and pay an excise tax on their total sales, the
responsibility for enforcing the law was originally assigned to the Treasury Department.
Initially, the handful of agents in the Narcotics Division, headed by Colonel Levi G.
Nutt, focused their attention on doctors and pharmacists who were dispensing opiates.
(Between 1914 and 1938, some 25,000 doctors were arrested for supplying opiates, and some
40 heroin-maintenance clinics were closed.) Most criminal narcotics traffickers were left
to the resources of the local police. In 1930, however, in what was to become a recurring
theme in federal narcotics enforcement, a grand jury found that the federal narcotics
agents in New York City had falsified their records to take credit for arrests made by the
New York City Police Department, and that some of the agents were themselves involved with
narcotics traffickers. In the midst of the scandal Colonel Nutt resigned, and the
Narcotics Division was reorganized into the semi-independent Bureau of Narcotics. In
August, 1930, President Hoover appointed Harry Jacob Anslinger, a career diplomat, as the
director of the new bureau. For the next three decades Anslinger was content to wage only
a rhetorical campaign, periodically citing lurid examples of the crimes of "dope
fiends" to arouse public concern over narcotics and marijuana. Little effort was made
to expand the size of the bureau or its law enforcement activities. Indeed, until 1968,
the Bureau of Narcotics never had more than 330 agents (most of whom were used in an
administrative capacity), or, for that matter, an annual budget of more than $3
million.

The ascendancy of the narcotics agency within the federal government really began only
in the final months of the Johnson administration, when it was decided to move the Bureau
of Narcotics from the Treasury to the Justice Department. As part of this belated
reorganization the fledgling Bureau of Drug Abuse Control, which had been created only
three years earlier in the Food and Drug Administration to regulate amphetamine and
hallucinogenic drugs, was merged into the Bureau of Narcotics and Dangerous Drugs, or
BNDD, in the alphabet-soup world of Washington acronyms. The Johnson administration
justified Reorganization Plan Number One, as the transfer was officially called, in terms
of efficiency: by consolidating the drug police into a single agency within the Justice
Department, investigators and prosecuting attorneys would be able to coordinate their work
more expeditiously. Since this same reorganization plan had been resisted earlier by
President Johnson (when Robert Kennedy was attorney general), and was now being rushed
through in an election year, Eugene Rossides and other officials in the Treasury
Department believed that the move was politically motivated. "Drugs have always been
a political football," Rossides commented. "Johnson's main reason for moving the
Bureau [of Narcotics] from Treasury was to strengthen the crime-busting image of Ramsey
Clark."

As it turned out, there was little political profit for Johnson to gain from this move.
Ramsey Clark selected John M. Ingersoll, a thirty nine-year-old law-enforcement officer
who had helped him plan the crime-control legislation, as the director of the new agency,
and asked him for a realistic appraisal of its potential for enforcing the laws. Ingersoll
found that the old Bureau of Narcotics, despite a flamboyant public image (which derived
in large part from television series such as T-Men), lacked the intelligence-gathering
means and techniques for disrupting the major channels of heroin distribution in the
United States. At most, its few agents could at times make sensational arrests, which
might satisfy the press and politicians but would have little effect on the narcotics
business that Ingersoll had a professional interest in curtailing. The other part of the
consolidation, the Bureau of Drug Abuse Control, had even fewer trained agents, almost no
informers, and little experience outside of tracking down pharmaceutical products. As
impressive as the reorganization might have looked on paper, it was of little use in
launching the sort of national campaign against drugs required by the election-year White
House.

Far more serious, however, as Ingersoll and Clark learned to their dismay, agents of
the old bureau were heavily involved in a major drug scandal which was being investigated
by a special group of Internal Revenue Service agents. Ingersoll immediately assigned nine
special inspectors to the case. As the evidence unfolded, in 1968, it became clear to him
that a number of federal agents in the New York office were in the business of selling
heroin or protecting drug dealers, and that the bureau itself had been the major source of
supply and protection of heroin in the United States. Under interrogation, many of the
agents openly admitted to being "owned" by dealers. All of this was set forth in
the Wurms Report, which was never released by the government. In December, 1968, Ramsey
Clark disclosed that various agents were indicted for their part in this illicit activity
(most of them were subsequently convicted). Eventually, almost every agent in the New York
bureau was fired, forced to resign, or transferred.

In examining more closely the roots of the corruption, Ingersoll found that the
nefarious working relationship between narcotics agents and traffickers was deeply
ingrained in the system used by the Bureau of Narcotics to assure a constant number of
arrests every year (which was the agency's main index of performance). In this system
every agent had a quota of arrests he was supposed to make, and his promotion and tenure
depended on his fulfilling this quota. Agents, however, could not fulfill their arrest
quotas with any degree of certainty without the active collusion of persons who were in
the narcotics business. Such illicit help was necessary because the sale of narcotics is a
crime for which there is no complainant to alert police: both the buyer and seller are
willing participants in the transaction. Nor are federal agents likely to be in a position
to observe such transactions: most heroin users buy their supply from a relative, friend,
or fellow addict they have known for several years in extremely private circumstances.
(The pusher who lurks vampire-like in schoolyards and other places, and approaches
strangers with his wares, is largely a television myth.) And the possibility of searching
suspects for heroin at random is limited by court rulings which require a search warrant.

Under these circumstances federal agents found that they could fill their monthly
arrest quotas only with the collusion of an informer, who could arrange to have street
addicts attempt to sell them heroin. The informers in the best position to make such an
arrangement with a narcotics agent were traffickers in the heroin business who, in turn,
needed the agents' protection. Like the Athenians who sent a sacrifice of a set number of
youths to the Cretan Minotaur each year, heroin dealers supplied the quota of arrestees
for federal agents, and, eventually, went into business with the agents.

State and local narcotics agents were similarly dependent on the informer. For example,
the chief narcotics officer in Baltimore claimed in a conference on narcotics informants,
sponsored by the Drug Abuse Council in 1975, that there were 800 active criminal narcotics
informers working with the police in Baltimore, and most of these informers were in fact
dealers who had a de facto franchise from the police department which they preserved by
turning in "competitors" not on the police payrolls. If this was the case in
other large cities, as most of the narcotics officers at the conference suggested, then
many, if not most, of the established narcotics distributors were probably in the employ
of local police departments.

Since street arrests would always be difficult-if not impossible - without informants
Ingersoll reluctantly came to the conclusion that the quota system would almost
ineluctably tend to corrupt agents in the field. After studying the problem, Ingersoll was
determined not only to replace all the agents who had become entangled with their
informers but also to do away with the informer system itself.

When the Nixon administration came into office, Ingersoll therefore presented the
problem to the new attorney general, John N. Mitchell, and proposed that the bureau
abandon the policy of arresting street addicts and dealers (which necessitated using
informers) and instead concentrate its efforts on the major traffickers who smuggled the
bulk of the heroin supply into the United States. Under this strategy the bureau would
change its index of performance from arrests made to the value of heroin shipments seized.
Mitchell, ever sensitive to the dangers of another scandal in the Department of Justice,
readily approved this approach. (Subsequently he was able to explain in press conferences
the low level of arrests by t he bureau by saying, "the Bureau of Narcotics and
Dangerous Drugs ... changed their mode of operation to concentrate on the large
international and interstate distributors, leaving to the states and localities the
responsibility for the enforcement of the drug laws with respect to the pushers on the
street.")

Since the new strategy required deploying American narcotics agents overseas, where
bulk seizures could easily be made, Mitchell sent new -guidelines (actually drafted by
Ingersoll) to the Customs Service, which traditionally had the responsibility for
interdicting contraband. It designated the BNDD as the agency that should control
narcotics smuggling abroad, and instructed Customs to support the bureau's efforts.

By 1970, the bureau was fully engaged in the business of international narcotics
seizures. With the help of computers and intelligence experts Ingersoll identified nine
"primary systems" of heroin distribution throughout the world. Scores of agents,
with large amounts of "buy money," were dispatched to Marseilles, Naples,
Hamburg, Hong Kong, and Bangkok to make contact with foreign traffickers. By stationing
agents abroad, the bureau was able to claim credit for "cooperative" arrests
that occurred in these countries (even if they had not participated in them). Thus the
bureau reported in 1970 total worldwide seizures (the bulk of which took place in France,
Italy, and Thailand) of 1,593 pounds of heroin, morphine, and opium with a street value of
$311 million. The street value was estimated by calculating the retail price at which the
heroin would have been sold if it had reached the United States and been fully diluted
into the maximum number of portions that could be sold on the street.

Ingersoll was fully aware that these seizure statistics were somewhat misleading. Most
of the heroin had actually been confiscated by foreign police in foreign countries, and it
could not be definitely established that it was ever destined for the American market.
Moreover, the value of the confiscated heroin was exaggerated manyfold by using the
street-level calculus. For example, a kilogram of heroin seized in France in 1970 could be
replaced by the trafficker in France for about $5,000; yet the Bureau of Narcotics would
report the street value for that same seized kilogram at $210,000, or roughly forty times
what the heroin was actually worth to the trafficker. Measuring the value of confiscated
heroin in terms of street value is analogous to measuring the value of rustled cattle in
terms of the price per pound of steak in the finest New York restaurant (in both cases,
the retail price reflects distribution costs and profits that never actually occurred).
Ingersoll was concerned that inflating the value of heroin could eventually encourage
amateurs to enter the business as dealers, but when he suggested using a more realistic
measure of the value of seizures, such as replacement cost, both White House and Bureau of
Narcotics press officers strenuously objected. Any such change, they claimed, would be
disastrous, since the press would presume that the lower figure indicated a sharp decline
in the bureau's performance. For example, after U.S. News & World Report revealed in
1970 that only 3 percent of the drugs being seized were "hard drugs," as opposed
to marijuana (in what appeared to Ingersoll to be a leak from the Treasury Department in
the ongoing interagency war), Krogh asked Ingersoll in a memorandum, "How can 'hard
drugs' be defined to show that much more than 25% of the seizures were of hard
drugs?" The problem was that the magazine was defining seizures in terms of the
weight of the seizures. Ingersoll replied in another memorandum, "Rather than
redefine 'hard drugs' to suit our purposes, perhaps we could approach the situation by
redefining our seizures in terms of ... specific units for each drug.... A unit of hard
drugs could be one injection and a unit of marijuana could be one cigarette. This method
would deflate the marijuana figure by a factor of 50-100 in relation to heroin." The
ever-present G. Gordon Liddy attempted to solve this same problem by suggesting the
development of an "Index of successful performance." This novel criterion would
divide the total weight of the drug seized in the year by the total number of estimated
users in the population. Since there were presumed to be 100 times as many marijuana users
as heroin users, it would appear that the government was, according to Liddy's calculus,
twenty-five times as successful in seizing heroin. In any case, Ingersoll continued
reporting the higher street value of seizures.

The strategy also proved quite successful with Congress. When Ingersoll was questioned
by members of the House Appropriations Committee in 1970 as to why his bureau produced
substantially fewer arrests despite a 50-percent increase in its operating budget, he
cited the hundreds of millions of dollars' worth of seized heroin (measured by its street
value) as evidence that his agency was becoming increasingly effective against the
higher-level heroin wholesalers. The committee apparently was persuaded by his argument,
since it recommended a further increase in the bureau's appropriation for the following
year. By 1971 the BNDD had grown considerably, with a force of 1,500 agents and budget of
some $43 million (which was more than fourteen times the size of the budget of the former
Bureau of Narcotics).

Although Ingersoll had been successful in expanding the Bureau of Narcotics from a
minor domestic law-enforcement agency to an international agency, the White House had some
different objectives for the bureau. Krogh pointed out to Ingersoll that a series of
private polls, commissioned by the White House staff, indicated that the American
electorate considered heroin "to be a prime problem," and believed that the
Nixon administration was not doing enough to control it. In particular, Krogh believed
that this lack of public awareness of the Nixon administration's efforts-and successes-in
reducing narcotics traffic stemmed from the bureaucratic inertness of Ingersoll's agency.
Not only had the number of arrests made by federal officers actually decreased during the
Nixon administration, but the BNDD press-relations officers were no longer emphasizing
federal police operations against domestic drug pushers and "drug fiends."
Instead, stories were being fed to the press about seizures o heroin in faraway and exotic
countries. Even more distressing to the White House, in 1971 the- BNDD began revising
upward its estimates of the number of heroin addict-users in the United States: the number
escalated from 69,000 In 1969, to 322,000 in 1970, and then to 560,000 in 1971. All three
estimates, however, were based on the same 1969 data, the higher numbers being projected
by using different statistical formulas rather than discovering new addicts. In
Ingersoll's view the inflated estimates served the bureau's interests by showing Congress
a greater need for appropriations to control the narcotics business. But with an election
only one year away, such an "escalation" of addicts during the Nixon tenure was
not the publicity the White House wanted. Geoffrey Sheppard, one of Krogh's young
assistants, complained, "Those guys in the Bureau of Narcotics were creating hundreds
of thousands of addicts on paper with their phoney statistics." But Ingersoll proved
impervious to a barrage of phone calls from Krogh and his staff. Krogh then intervened by
ordering that all press statements and public speeches on narcotics be coordinated and
cleared by his office (Richard Harkness, a former NBC correspondent, was appointed as the
White House press coordinator for matters concerning drug abuse). Krogh further suggested
that a large number of well-publicized arrests by narcotics agents would be most helpful
in calling public attention to the administration's new war on drugs. Though Ingersoll
agreed to coordinate his public statements with the White House, he adamantly refused to
change the bureau's policy of deemphasizing street arrests. He again argued that such
"revolving door" arrests would relieve neither crime nor the drug problem, and
would only serve to lead federal agents into working again with underworld informers.
Krogh cut the discussion short by saying, "We cannot accept your thesis."
Ingersoll, who was concerned that his professional reputation might be severely tarnished
if he reverted to the policy of mass-produced arrests for political purposes, appealed to
John Mitchell for support. Mitchell, who, at least to Ingersoll, seemed concerned about
the "long arm" of John Ehrlichman bypassing his authority in the Department of
Justice, told Ingersoll that he, "not Krogh, [was] in charge of the bureau's
policy." Since Ingersoll had acquired supporters both in Congress and in the
law-enforcement establishment, he could not easily be fired. Thus, in 1971 Krogh was
stymied, at least temporarily, in his attempt to control the narcotics police.